Thursday, July 17, 2014

GSK CHINA - Bribery was Rife 13 Years Ago

The Financial Times (FT) are reporting that the recent allegations of bribery and corruption by GlaxoSmithKline employees in China is nothing new. Furthermore, the FT claim that Peter Humphrey was part of the team in 2001 that investigated GSK's China vaccine business, resulting in the firing of about 30 employees.

Humphrey, along with his wife, Yu Yingzeng, were arrested over a year ago for breaching data protection rules. The breach was in connection with GSK’s current scandal. A few days ago they were formerly charged by Chinese authorities and their trial has been set for Aug 7.

According to the FT...

Two people familiar with the 2001 scandal said GSK found that staff were bribing Chinese officials and taking kickbacks. The company acknowledged the matter for the first time to the Financial Times, but said it had dealt with the issue rigorously.

The earlier scandal came the year after GSK was formed via a merger of Glaxo Wellcome and SmithKlineBeecham. In late 2001, Paul Carter, GSK’s new China head, asked PwC to investigate after suspicions of corruption emerged, including the fact that two staff had been detained in China without him being told.

PwC confirmed the suspicions, and Mr Carter fired the Chinese head of vaccine sales in China. Mr Carter left GSK in 2005 long before the current problems emerged. He declined to comment.

Chris Baron, the general manager for the vaccines unit in 2001, denied knowledge of the bribery at the time. He was suspended and, soon after, left the company.

Andrew Witty, Glaxo's current CEO has denied knowing anything about the current Chinese allegations.

The same was said back in 2001 when Witty was the company’s head of Asia-Pacific.

According to the FT...

At the time of the 2001 incident, Sir Andrew Witty, GSK chief executive, was the company’s head of Asia-Pacific, but his responsibilities excluded China. GSK said Sir Andrew “was not involved in and was not aware of” the case at the time.

Anyone see a pattern here?

In 2012, Andrew Witty was accused by a GSK whistleblower as being part of a criminal cover up regarding GSK's recent $3billion fine to the Department of Justice.